E-Loan 5.50% APY Savings Account Review

I recently opened a savings account at E-LOAN to try out the new 5.50% APY that a few people kindly pointed out to me while I was gone. Here’s a brief review of the opening process and my initial thoughts.

Basics
This is a new FDIC-insured online savings account, similar to Emigrant Direct, Capital One 360, and others. You need $5,000 to open the account, but after that there are no monthly fees. Per their rates page, they are currently paying 5.50% on all balances, so one won’t need to keep $5,000 there forever. But you may need to keep at least $500 in there (see below).
One unique and important thing about this account is that you can only move money in and out via your single designated external account. That means no linking with other savings accounts like HSBC Direct, or paying your mortgage or credit card bills directly with this account. You can change your single external account later, but only 4 times in a year.

Opening Process Review
The opening process was very short and sweet, just how I like it.

1. You fill out the account application, pretty standard stuff. Two things to note:

(i) Be sure to notice the privacy opt-out form that you have to click on and open a extra window to get to. Hopefully by filling this out I’ll avoid being bombarded by mortgage refinance requests from E-Loan’s other divisions.

(ii) Unless it applies to you, do not tick the ‘I am subject to backup withholding’ box at the end. It’s right next to the ‘I agree to the Terms and Conditions’ box and may trip some people up.

2. You will have to open with at least $5,000, so you’ll need the routing and account number of your chosen external account. It will be withdrawn electronically via ACH. You cannot make deposits by mail or by wire, ever.

3. After your application is sent, you will get an e-mail with further instructions. You can actually log into your account already, but you can’t do any account changes until after verification.

4. About 1-3 business days later (two for me), the money should be withdrawn from your funding account and show up in your E-Loan account on the same day. At the same time there will be two small deposits and two identical small withdrawals. So if you’re using a savings account that limits withdrawals to six per month, be careful.

5. You log back into the E-Loan site and verify the amounts, and that’s it. Not bad at all. You don’t have to wait for letters via snail mail or anything. Two business days total for me from application to full access.

Initial Thoughts
The interface is very clean and simple. Here is a screenshot of my Account Summary page:

Transferring funds was pretty straightforward, if you do it early enough the transfer went through the next business day for me. You need to answer a security question every time you do a transfer.

Additional Info
- Only online statements and only one per quarter, no paper statements.
- Like other savings accounts, only 6 withdrawals allowed per month. Unlimited deposits okay.
- Interest compounded daily and credited monthly.
- Bankrate 3-star Safe & Sound Rating “Performing” for Banco Popular North America (BPNA), the actual bank behind E-Loan.
- I did not get a hard credit pull, and there are no reports of any.
- From their Term and Conditions:

ACCOUNT CLOSURE – You will be expected to maintain a balance of at least $500.00 in your Savings Account. If your balance is less than $500.00 for ninety (90) calendar days or more during any 12-month period, your Account may be closed. If we decide to close your Account, we will either return any funds in that Account (along with any accrued interest) to your External Account or send to you a check for that total amount.

INTEREST ON DEPOSITS – Deposits by Electronic Funds Transfer (EFT) that are received by 12:00 p.m. Pacific Time (PT) on a business day, excluding Federal Reserve Bank holidays, generally accrue interest from the day the EFT is received. Deposits by EFT received after 12:00 p.m. PT generally begin to earn interest from the next business day. For example, interest will generally begin to accrue from the following Monday for Friday deposits received after 12:00 p.m. PT.

Updates

- E-Loan Savings appears to have had some problems with duplicate transfers causing overdrafts. Please see comments below for details. I have not experienced these but I have also not done many transfers. E-Loan has offered to pay for all overdraft fees, please ask them if they have not offered this to you.

I shy away from account with minimums although $500 is a lot less than $5,000. Although the nice thing is – the repercussion is not fees, just account closure – you get to keep your money + interest. I’ll have to think more closely about this one. Maybe there isn’t a down side after all.

I’m starting to get wary of some online savings accounts. I opened one recently with Apple Savings, their Grand Yield Direct, or some such name.

With a current 5.25% rate, that is a fine rate. But I see now how they do it…they don’t let you deposit too much money into the account.

After setting up my external links — with my checking account and various other online savings accounts, such as Emigrant and ING — I discovered two bad limits in the Apple account for external transfers: a $2,000 daily limit on transfers into Apple, and a $5,000 monthly limit (30-day rolling). And other limits apply to withdrawals of $15K daily and $25K monthly.

Now I’m lucky enough to have more than $25K that I was considering depositing, but limiting me on withdrawals is not something I can accept and limits on deposits seem to be how they can afford that 5.25% rate.

I believe they don’t show this info when you apply or in the FAQs.

Dave, who has an interesting history with Apple Bank for Savings when they screwed up on a mortgage application about 25 years ago

I just setup an E-Loan account and transferred funds from my ING DIRECT online savings account. The process was quick and the transfer occurred the next business day. No problems so far. I only use this account for storing cash (rather than paying bills) so any limitations on bill paying aren’t an issue for me.

I was looking into E-LOAN and was going to move the money from GMAC. GMAC’s rate on > $500 has increased to 5.25% APY from 5.00% APY. An increase due to E-LOAN? Now maybe I’ll fund from ED as their rate is only 5.05% APY.

I opened an account but for most of the time its saying under maintainence. Today, it says maintainence and shows my balance as $0. Very scary. I never experienced such a bad online banking system before.

I tried to open an E-loan account funded from my Amboy Direct savings. E-loan initally showed my account as funded then dropped my account to $0 and funds were never transfered. So much for the theory that E-loan can link to any account with a routing and account number. I’ll transfer funds from Amboy to my checking account and try again.

No it was not. For a couple of days they always had the message that the system i sunder maintenance.. But anyway I havent had any more problems after that.. The other thing though it that they dont show the interest you are accruing like Emigrant direct.. Is that right or is there some other place where I can find it? Thanks.

Thanks, i’ve always been a fan of your savings acct analyses. I am considering moving my money out of ING and HSBC to eloan. However, i recall reading somewhere they you should never withdraw ALL of the money in your online savings accounts. Are there fees on empty accounts? What is the minimum amount of money that needs to be left in the accounts?

Hey, I was wondering about ED if I can use an outside saving/bank to initiate a ACH.
Example I use Etrade transfer and innitiate ED to ETRADE through them. I read somewhere in their TERMS that no other withdrawal can be done, only ED transfer is accepted.

Hi Jonathan, now that it’s almost 2 months since you opened the eloand Savings, have you (i)experienced any problems with your interest credited to your available balance or problems with logging in to their website or seeing transfer/debit problems like the others… (ii) have you noticed any increase in any email or/& phone calls or/& regular US Postal Mail from eLoan and/or it’s affiliates, even though you filled out their privacy opt-out pop-up????

Well, they certainly do make it a pain to open an account. When trying to choose my username, they kept bouncing the usernames I chose, saying that the username could not be made out of my name and must include both letters and numbers. That’s fair enough for passwords — but usernames? Come on, people. It was enough to give me pause about the overall site and wonder whether they really have professionals on staff. ING’s website, on the other hand, is beyond reproach. Now if only ING would pay the same interest rate.

I opened 12 month CD account with them last week, they charged 4x (!!!) times the same amount on my Chase checking account, which caused me to pay penalty at my checking account for insufficient funds.
As of this morning, I informed that that I will be closing my CD account and move my money elsewhere. They may offer higher interest, but it not worth the agravation.

I opened a savings account with eloan earlier this month and they withdrew my initial deposit twice, causing me to overdraw and pay a penalty fee at my regular bank. Their customer service is a NIGHTMARE – IF you manage to talk to them (after hours on hold), they contradict each other, they have promised to do things but not done them, etc. All I want to do at this point is close my account and get my money back and I hope they can manage to get that right. When you go on the website to check your account, the numbers seems to change retroactively and other bizarre things.

I have had an ING account for year and never had any problems whatsoever of this nature with them. The extra percentage point is just not worth the pain and suffering involved in dealing with eloan.

I am in the process of trying to get my savings out of E-Loan and it is a nightmare! They say I had clicked the icon for ‘change external account info’ after I called 2 weeks after initiating the transfer to my outside account. That was last week. Now I still don’t have my money and feel that I am being jerked around. “It takes time,” etc. Terrible customer service, and no comfort whatsoever. I would like for someone to have at least been sympathetic to my anxiety. I will be so relieved when I get my money back. Never again! My husband is right when he says he’ll only put his money where he can go and get it out if he wants. I’m through with internet banking.

Thanks for all the comments, I have added this to the initial review. Although I have not experienced these problems myself, I have not done many transfers. I also hear that E-Loan has offered to pay for all overdraft fees, please ask them if they have not offered this to you.

I’ve had an eloan account for a little more than a month now after reading about it on this site. When I check my statemate it shows how much interest the account made last month, but that money has not been added into my account. Does this happen to everyone else? When does accrued interest get added into your account?

After I signed up for this account on 12/1, I discovered this blog and was concerned about the “glitches” mentioned in some of the posts. So I used their “secure messaging” to ask the following: “I have just opened my account, but discovered in a blog that at the beginning of November, there was a problem with unrequested transfers being made to or from E-Loan savings accounts. Has this been corrected and have safeguards been put in place to prevent any future occurrences of this type? This is a very big concern of mine.”

Here is their reply:
“Thank you for your message.

We have already communicated this error to your linked
institution and rectifyied the situation.

E-LOAN uses Secure Sockets layer(SSL) technology suporting up to 128-bit encryption to prevent unauthorized parties from viewing any personal information transmitted to or from E-LOAN during your session. These security measures are fully outlined in our Privacy & Security Policies.

I apologize for this confusion and inconvenience.

Please send us a secure message or call (866) 576-7283
with any further questions.

Thank you,
Ruthie”

Well, in the first place, I didn’t say that it happened to me, so why have they contacted my linked institution to rectify the situation? And second, I am a little concerned that this message has spelling and grammar errors. It just doesn’t give me a warm fuzzy. However the response was fairly timely. I sent the message on 12/1 and received the reply on 12/2. Gotta give them credit for that.

JJ & Shraz – E-Loan claims that you cannot do ACH withdrawals from this account. HOWEVER, I sent them a message asking for my account number and routing number which they in return supplied and I have used this information twice so far to pay off my Discover credit card (through the Discover website). So I’m guessing that their “no ACH withdrawal” policy is really just a bogus ploy to keep your money in their account longer and not move it around quite so much (saves them fees).

I have been reading the blog for awhile and enjoy it. I found E-Loan because of this blog, and wanted to post my horror story (not blaming Jonathan at all, btw :). I opened a savings account (POD, which is important for this story) back on October 3rd after reading how smooth everything went for everyone.
My account opened no problem, transfered money from my GMAC account, all went well, so I transfered some more from their web site, again smooth. I then forgot about the account for a couple of weeks, letting it just earn interest. I then had to update some of my personal information, logged in and went to the profile page, entered my username, passwrd, and SSN as requested, I promptly got locked out of my account (This is about October 25th).
I call customer service, wait on hold for about 20 minutes, get to a rep, ask that they unlock my account. They ask for my personal information, I give it to them, including my SSN. Turns out the SSN they have on file for me, is not mine. So I go round and round with them, turns out they used to POD (Pay on Death) person’s (My wife) SSN as the primary tax payer ID and not mine.
They tell me they have to fix that in their system before they can unlock my account, and that someone will call me back in the next 24 hours. 3 days later I call them, get anoyed, demand to speak to a supervisor, and they unlock my account. But they tell me they can’t fix the SSN issue in their system and have to “send it to IT”, and that someone would call me back soon.
A week later I log into their web site and all my information is gone. I call them on the phone, 30 minutes on hold and I get a rep who spends another 30 minutes calling various people only to find out they had to create me a new account with the correct SSN, but no one bothered to call and tell me what the username/password was for the new account. I get the rep to reset the password and log in to their site.
Once logged in I discover I could only view my account balance and logout, no profile updates, no transfers in our out, etc (everything else was gray). I ask the rep (Who was still on the phone) what is going on, and after another 20 minutes of calling various people she informs me they are “not done” updating my account yet, so they havn’t moved my profile information over from the old account.
I had to go out of town on business the next day, and didn’t get back into town until after Thanksgiving. So on Monday November 27th I called them up as I still couldn’t transfer funds, view account statements, etc and told them I just wanted to transfer my funds out of their bank and close my account. I verified with the service rep my GMAC account information, and she said the request would have to “go back to corporate” because my account was “all messed up”.
On Thursday November 30th my funds were still not showing up in my GMAC bank account, so I called again, and after 20 minutes on hold spoke to a rep who saw no record of me calling on Monday, and nothing in their system about a funds transfer request. So I patiently asked that they do the transfer again, reconfirmed all my bank information, and was again told it would have to go back to corporate.
On Friday December 1st my E-Loan account showed a $0 balance, but nothing in my GMAC account. Then finally on Tuesday December 5th my money showed up in my GMAC account. While I lost 4-5 days of interest I was just glad to have my money back.
In all cases I was cival to every service rep I spoke with, I never raised my voice of berated them, and they acted in a simular fashion. I think E-Loan just was not prepared for the volume of calls and load on their system that their new bank produced. I hope others find my story entertaining as well as useful as they try and make a decision about using (or continuing to use E-Loan).

I’m getting out of e-loan. First the glitch, which threw my account from $8000 to $28000 to nothing. That took a week to resolve. Then I waited over two weeks for a response to my email. Now the interest isn’t being deposited, and the website is just terrible compared to ING. And now the rate is coming down… I give up.

Oops! One more question… Since it appears that ACH withdrawals can be made, what about deposits? Like linking ING or HSBC with E-Loan? That way you wouldn’t be limited to only one linked account. Has anyone tried that yet?

I opened this account about 3 months back. Then suddenly it was disabled. I later found out that they had sent the wrong info after 3 months to the credit bureau and got returned as invalid. Without even giving me a call they disabled my account. Then when talking to the representative I found that in spite of providing information that it is a joint account, it was not listed as a joint account, so not all my funds were FDIC insured. Also all the phone numbers were listed incorrectly. It was the worst experience. They claimed to have fixed the issue ( I had to call 5-6 times). Later after a week (20th december) they closed my account and my funds were gone, 0 balance. They did not know what happened to my account. Then found out that someone from their chicago office closed the account. Now I dont have any access to funds until 27th december. I am trying to reason with them. They have also accepted that it was their mistake. My honest opinion is that no one should open an account with such an incompetant bank. I have dealt with ING and emigrantdirect before and though their rate is about 0.2% lower, they are much more safer and better banks. Just wanted to let everyone know my experiences. I will absolutely not recommend this bank to anyone.

!!WARNING!! Kimv, kt, and anyone else looking to do ACH withdrawals – I rescind my previous comment and will emphatically say now DO NOT count on ACH withdrawals from E-LOAN to go through. As mentioned in my previous comment Discover was able to take out funds from E-LOAN for payments in November and December (so I thought it must be working ok) but in January I found out today that Discover took the payment and then E-LOAN took it back. I was (of course) NEVER notified by either institution of this change in my scheduled transaction and was assessed approximately $215 in fees by Discover. All I saw from Discover was that the payment got returned and I got charged lots of fees. All I saw from E-LOAN was a withdrawal (expected) and a deposit for the same amount one day later (unexpected).

So I called Discover who informed me that my bank had rejected the ACH transfer. So I called E-LOAN who said they don’t allow ACH withdrawals beyond my one linked bank account. When I asked why the first two payments went through, they said well they shouldn’t have. So I called back Discover and begged and pleaded and got my 0% rate restored and all fees taken off except for the $35 returned payment fee (credit was apparently still unaffected). Pretty nice of them if you ask me (I did lose my one get-out-of-jail-free card with them though so I’ll have to be much more careful from now on).

And then I went and transferred every last cent out of my E-LOAN account. The extra 0.33% over other online banks just isn’t worth it.

I signed up several weeks ago and transferred some dollars from one institution, Amsouth, to iGoBanking.com.

During the transfer process I got nervous because it said “click here for fees for transfer.”

I clicked the link and it opened a new window where all it explained was transfer limits. I looked through FAQ and all over the site where it explained the transfer fees (not mentioned anywhere).

I sent an email last Friday with a ‘read receipt’ attached. The email was read Monday morning. It is now Wednesday night and I still have no response. I sent a follow up email this afternoon and got a read receipt, but still no response.

I am concerned that this is an example of there customer service and it makes nervous and putting my money there.

I called, and did get an answer. The woman spoke English very poorly, wasn’t very polite and seemed annoyed that I was asking her questions about the fees, which she said there were none.

Of course we all have probably had experience talking with “John” at some big company who has no way to reach him or extension to hold him accountable to what he says.

Apparently there are no fees right now, according to this one person. But it isn’t clear on their site, and no one responds to emails.

Not sure I want to put my money there. Emigrant Direct might be a few points lower on the rate, but they respond quickly.

Had my E-Loan account open since last Nov. So far, no problems.
I mainly use it to store money. Even though, their rates gone
down from 5.5%, their rates are still better than what most banks offer. The only thing I don’t like about E-Loan is, when money is deposited, it takes a while before it is officially in your account.

Stay away from E-Loan. This is a terrible business. 6 Months ago, when I was shopping for where to put some money for a CD, I read the horror stories about E-Loan, but figured it must be an exception and they surely would have the mess fixed by the time my CD matured.

Wrong.

I told them to move my money at maturity back to an external account. After maturity, they deleted the on-line instruction I gave them and didn’t transfer the amount, and so now everyday I working with these crooks I am losing money that I should be making.

Don’t go with E-Loan for anything. These guys are the worse of the worse.

So I stumbled onto this entire blog by accident, and have read several of the posts, and about E-Loan and the whole high-yield savings account issue, I have one word: HSBC. As in, HSBC Online Savings. It’s now May 2007, and I started an account with them in May 2006. I have had absolutely no problems. Their 5.05% APY is lower than E-Loan’s but higher than ING’s, and here’s the real benefit: they have a bona fide routing number, you can ACH in and out with external accounts, brokerages, etc. (apparently without limits–their might be an amount limit, like $300,000, but this is irrelevant for me), and best of all, you get an ATM card and you have access to the thousands of branches worldwide–I routinely use my HSBC ATM card in India, in France, and NYC, and no, it’s not a DIFFERENT account, it’s an ATM card for my 5.05% APY ONLINE account. So what’s the point of even looking elsewhere?!?!

This has been truly a nightmare experience. I submitted preliminary information to inquire about ELoan Rates for a mortgate and in a span of 2 days, I have received a total of 11 phone calls + 3 emails. The day after submitting info, on Saturday 5/12/07, I spoke with Nick Rogers and advised that I was NOT ready to commit to ELoan for a loan application and he stated he would withdraw the request for application. On Monday, 5/14/07, I received 10 phone calls from 888-356-2622. I CANNOT believe this is any company’s practice and am now 100% certain I will not be using ELOAN EVER. I am contacting the BBB to file a complaint, and I am keeping official copies of the phone calls as I believe this is truly considered harrassment.

Trackbacks

[...] The rate they offer is not as high as what you can get from, for example, EmigrantDirect or HSBC, and E-Loan has a much higher rate of 5.5% APY (don't know how long they can keep at that level). The only problem I have with this offer is that you have to pay 2 bills every month for a year in order to get the bonus. Since the 5.0% rate with their e-Savings account isn't too bad, it may worth a try. [...]

[...] I had planned on opening up an account there, but after reading on MyMoneyBlog about the many problems people have been having with their accounts at E-Loan, I’ve decided against it.? I’m still at ING Direct for now, but would really prefer another institution since ING doesn’t let me link to my Fidelity brokerage account (via the United Missouri Bank account that serves as the cash account for Fidelity).? I do like ING Direct’s system for being able to easily open subaccounts, though.? If there was another bank which allowed links to my Fidelity-affiliated account and easily let me set up subaccounts and had a competitive interest rate, I’d move there.? If you know of any, please let me know. « Wal-Mart Deserves the Nobel Peace Prize? | [...]

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